Nokia’s $2bn settlement payment received

The financial results for the second quarter of 2017 were released by Nokia this week and the results gave readers a pretty good insight into what’s been going on within the company. An “up-front cash payment” was listed on the document with a $2 billion cost attached to it, raising speculations of the sender.

This week, it was confirmed by Nokia in a statement to Nokiamob that the cash payment came from Apple as payment for the settlement agreed in May.

The $2bn settlement agreement reached in May 2017 was between Nokia and Apple. Nokia sued Apple in 2016 in multiple countries for a licensing disagreement over licensing fees for Nokia technology. The battle was lengthy and complex, with Apple countering the claims with its own lawsuit alleging Nokia of transferring patents to patent holding entities in a bid to gain additional royalties from Apple, violating FRAND (Fair, Reasonable, and Non-Discriminatory) deals Apple had established with Nokia.

However, the settlement agreement from May saw the two companies agreed to a multi-year patent license deal, where Nokia would provide “certain network infrastructure products and services” to Apple, and Apple would then return all Nokia-owned health products to Apple retail and online stores.

“Second, we got a substantial upfront cash payment of €1.7 billion from Apple, strengthening further our cash position. As said earlier, our plans is to provide more details on the intended use of cash in conjunction with our Q3 earnings.

Nokia Technologies led the way, with sales up 90% versus the same period last year. That was largely, but not completely, driven by our recently announced agreement with Apple; and you can also see the impact of that agreement in our cash position.”

So far, Apple has only partially paid the $2 billion cash sum to Nokia, so besides finishing that payment, Apple will also continue to pay royalties to the company during the term of the agreement.